Opinion
B299124 c/w B304066
02-19-2021
HAMRICK & EVANS, LLP, Plaintiff and Appellant, v. HERBERT HUDSON, et al., Defendants and Respondents.
Cooksey, Toolen, Gage, Duffy & Woog, Phil Woog and Matthew R. Pahl for Plaintiff and Appellant. Rostam Law, Inc. and Glen H. Mertens for Defendants and Respondents.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC607098) APPEAL (B299124) from a judgment of the Superior Court of Los Angeles County, Joanne B. O'Donnell, Judge. Affirmed. APPEAL (B304066) from an order of the Superior Court of Los Angeles County, Michelle Williams, Judge. Affirmed in part, reversed in part, and remanded with instructions. Cooksey, Toolen, Gage, Duffy & Woog, Phil Woog and Matthew R. Pahl for Plaintiff and Appellant. Rostam Law, Inc. and Glen H. Mertens for Defendants and Respondents.
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In this consolidated appeal, plaintiff law firm Hamrick & Evans, LLP (the Hamrick Firm) appeals from the trial court's April 25, 2019, judgment in favor of its former clients and defendants, Herbert Hudson (Hudson), Paul Goldsby (Paul) and Kennedy Goldsby (Kennedy) (collectively Respondents) (case No. B299124), and a December 6, 2019, order awarding, among other things, expert fees to Respondents (case No. B304066).
As to the April 25, 2019, judgment, the Hamrick Firm argues the trial court abused its discretion in admitting the testimony of two defense experts, Edward O. Lear and K. Andrew Kent. We conclude that the Hamrick Firm has not demonstrated an abuse of discretion, and therefore, we affirm the judgment.
As to the December 6, 2019, order, the Hamrick Firm argues the trial court erred in awarding expert fees to Respondents pursuant to Code of Civil Procedure section 998. Respondents concede this point and "abandon their claim to such fees as a cost under . . . Code of Civil Procedure [sections] 998 and 1032[, subdivision ](b)." Accordingly, we do not decide this issue on appeal. We reverse, in part, the December 6, 2019, order relating to the Hamrick Firm's motion to tax costs, and remand the matter to the trial court so that it may modify the order to reflect Respondents' concession that they are not entitled to an award of expert witness fees. We affirm the December 6, 2019, order in all other respects.
BACKGROUND
A. Pleadings in the Instant Litigation
On January 13, 2016, the Hamrick Firm sued Respondents to recover an unpaid balance of $507,884.32 in legal fees and costs that it incurred while representing Respondents in a matter entitled Goodness Films, LLC v. T.V. One, LLC, et al., case No. 2:12-cv-08688-GW (T.V. One Action). The Hamrick Firm alleged causes of action against Respondents for breach of contract, book account, and fraud, among others. During trial, the Hamrick Firm dismissed its claim for fraud.
Hudson and Paul formed Goodness Films, LLC, for the purpose of producing the Roscoe's Show and other television and movie productions.
B. The T.V. One Complaint
According to the October 10, 2012, complaint filed in the T.V. One Action, Hudson is the founder of the restaurant Roscoe's House of Chicken and Waffles. Over the course of several years, Hudson, Paul, and Kennedy developed an idea for a television program entitled Roscoe's House of Chicken and Waffles (the Roscoe's Show). During their efforts to pitch the show, Respondents provided Roscoe's Show materials to Miguel A. Núñez, Jr. and Edwin B. Weiberger. Núñez and Weiberger subsequently passed off the show as their own and negotiated with T.V. One to create a similar show entitled Belle's. Respondents sued T.V. One, Núñez, and Weiberger in federal district court for, among other claims, copyright infringement and a preliminary injunction.
In December 2013, the Hamrick Firm was substituted out of the matter. Attorney Carlos De La Paz was substituted in. In November 2014, a jury returned a defense verdict.
C. The Trial Court Limits the Testimony of Respondents' Standard of Care Experts
In October 2017, in connection with the Hamrick Firm's action to recover unpaid legal fees, Respondents designated expert witnesses Kent and Lear. According to the designation, Kent would opine as to "the applicable standard of care required for attorneys practicing copyright and idea theft litigation," and assist the jury in understanding whether the Hamrick Firm fell below that standard. Lear would opine generally as to the standard of care, rules of professional conduct, and legal ethics, and assist the jury in understanding whether the legal representation provided by the Hamrick Firm fell below the standard of care or violated the rules of professional conduct or legal ethics.
The Hamrick Firm filed motions in limine to exclude Kent and Lear from testifying at trial. The Hamrick Firm argued Respondents did not assert any tort claims or affirmative defenses relating to the standard of care. Thus, the opinions by Kent and Lear were irrelevant.
The trial court denied the motion in limine to exclude Kent's testimony. However, the trial court ruled "Kent may not testify concerning any tort 'standard of care' and whether [the Hamrick Firm] met that standard because there is no malpractice claim in the case. Kent may testify as to whether [the Hamrick Firm] 'performed its obligation' under the retainer agreement. Any objection [the Hamrick Firm] may have to Kent's testimony as speculative or lack[ing] foundation may be made as the questions are posed."
The trial court granted in part the motion to exclude Lear's testimony. "Lear may not testify that [the Hamrick Firm] told [Respondents] at the outset of the underlying case that 'the value of the case was in the neighborhood of $100 million.' He admits that [Respondents'] counsel asked him to assume this for purposes of his opinion, but he does not know [if] it's true. Any opinion he expresses based on the [Hamrick Firm's] '$100 million' representation is not based on any facts and would confuse and mislead the jury and is excluded per Evidence Code [section] 352. Lear may not testify concerning 'the applicable standard of care' required for attorney's litigation cases in California 'and relevant legal issues that may be presented.' Lear may not testify[ ] concerning proper and reasonable case handling protocols, policies and procedure, whether [the Hamrick Firm's] conduct fell below the 'applicable standards.' Lear may testify concerning whether the actions of [the Hamrick Firm] violated any standards of professional responsibility—with specific reference to the standard(s) violated. Lear may testify as to whether [the Hamrick Firm's] billings or invoices violated any ethical rules, with specific reference to the rules violated."
At the hearing on the motions in limine, the trial court clarified that "[n]othing the court is saying is preventing Mr. Kent from testifying as to whether [the Hamrick Firm] performed under the contract or not."
D. Trial on the Hamrick Firm's Action to Recover Fees
1. Respondents' Theme
During Respondents' opening statement, defense counsel framed the issue for the jury as not only a question as to whether Respondents failed to pay legal bills, but also as to whether the Hamrick Firm "provided the services that this retainer agreement, this contract required them to provide to their three clients." Counsel suggested the Hamrick Firm did not fulfill their obligations under the contract, stating the Hamrick Firm attorneys acted with "ineptitude" in their representation of Respondents.
Outside the presence of the jury, the Hamrick Firm objected to the use of the term "ineptitude" as being akin to negligence. The court responded that "[t]here is a very . . . fine line between what constitutes a tort and what constitutes a breach of contract in some cases . . . . I don't think [the] defendant[s] should be deprived of the ability to use a little bit of creative language to express its defense."
2. Evidence Relating to the Early Stages of the T.V. One Action
In September 2012, Respondents executed a retainer agreement with the Hamrick Firm for the "initiation and prosecution of an action for copyright infringement and breach of implied contract among other remedies arising out of the unlawful misappropriation of" the Roscoe's Show. Under the agreement, the Hamrick Firm would "perform the legal services called for under this agreement, keep [Respondents] informed of progress and developments, and respond to [Respondents'] inquiries and communications."
Paul, who selected the Hamrick Firm, was the firm's main contact throughout the litigation. When it came to paying invoices, however, Hudson agreed to pay the bills, and each payment to the Hamrick Firm was made by Hudson. Paul testified that he spoke with Hudson about the matter one to two times a week, but Paul never advised Hudson on any of those occasions that there were outstanding legal bills.
According to Hudson and Paul, they represented to the Hamrick Firm that their goal in retaining legal representation was to stop T.V. One from airing Belle's. However, Hamrick Firm attorney Altheus Raymond Hamrick testified that the Respondents also wanted damages. According to Hamrick, he advised Respondents that obtaining an injunction would be difficult and understood that Respondents wanted to proceed with damages claims because Núñez and Weinberger betrayed their trust.
In December 2012, the district court denied Respondents' preliminary injunction on the ground that Belle's and the Roscoe's Show were not sufficiently similar. Six episodes of Belle's aired on the T.V. One network in or around March to April 2013. The series was cancelled in April 2013.
Paul testified that after Belle's went off the air, he advised the Hamrick Firm that Respondents no longer wanted to pursue the matter, and urged the attorneys to settle it. Similarly, Hudson testified that once Belle's was cancelled, he told Hamrick Firm attorney Martin Barab, "As far as I am concerned, it is over." Hamrick Firm attorneys, however, urged Hudson and Paul to continue with the litigation. In particular, the attorneys advised them that because they filed a claim for copyright infringement, dismissing the matter would put Respondents at risk of having to pay the legal fees of the T.V. One defendants. Neither Paul nor Kennedy remembered that the Hamrick Firm advised them of this risk before they filed the T.V. One Action. Further, Hamrick Firm attorneys urged Respondents to continue the litigation because the potential damages for the matter were considerable, amounting to "tens of millions of dollars." As Paul put it, "[t]hey told me several times that they thought it had that kind of value and they were trying to keep [Hudson] in the case when I thought we should not be in it."
Under section 505 of the Copyright Act, "In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney's fee to the prevailing party as part of the costs." (17 U.S.C. § 505.)
3. Evidence Relating to the Valuation of the T.V. One Action by the Damages Experts
In September 2013, two experts, Larry Gerbrandt and Mark Litwak, provided reports to the Hamrick Firm relating to Respondents' potential damages in the T.V. One Action. Gerbrandt opined that Respondents' lost revenue potential totaled between $9.4 and $26.1 million. This value was based on an assumption that the Roscoe's Show would have run for 78 episodes.
Litwak opined that select portions of Respondents' damages, which included loss of story rights payment; loss of producer, director, and writer fees; loss of screen credit; and loss of out-of-pocket pre-production expenses, totaled nearly $7.5 million. Litwak further provided an analysis outlining why the cancellation of Belle's after one season should not affect Respondents' damages estimate.
The Hamrick Firm provided Gerbrandt's and Litwak's reports to Respondents. Kennedy read the reports. Paul did not. The Hamrick Firm did not discuss the experts' analyses with Respondents.
According to De La Paz (the trial attorney in the T.V. One Action), the district court judge found the damages reports were unreliable.
The trial court did not permit further evidence of the district court's rulings that occurred after the Hamrick Firm substituted out, finding they were minimally probative of whether the firm failed to perform under the contract.
4. Evidence Relating to Settlement Offers in the T.V. One Action
Paul testified that in August 2013, he and Kennedy attended a mandatory settlement conference accompanied by attorney Barab. The magistrate judge explained that Respondents' copyright claims were tenuous, but he believed he could obtain a commitment from the T.V. One defendants to settle for approximately $1 million. Paul responded that Respondents would be interested in pursuing such a settlement. Thereafter, Barab interrupted the discussion to claim that Paul did not have authority to settle on behalf of Respondents.
After the settlement conference, "the other lawyer that was in the room came to [Paul] separately . . . maybe [15 to 30 minutes] later, and informed [him] that T.V. One had, outside of the judge's chambers, offered $50,000 . . . to settle. [Paul] told [the attorney] that [he] absolutely wanted to accept that and [he] would talk to [Hudson] about it." Hamrick testified that the clients decided they did not want to accept the $50,000 offer.
Paul testified that thereafter, Weinberger offered to settle for $125,000. Again, Paul told Barab that he "[a]bsolutely" "wanted to settle the case." Hamrick testified Weinberger "never offered a dime."
Then, in November 2013, Paul received an email from Barab that forwarded an email from Núñez. Núñez claimed he did not have funds to settle with Respondents, but offered instead to assign his interest in Belle's. Paul testified, "this was very acceptable. I talked to [Hudson] about it and Kennedy and rationally understood . . . that this was all he could possibly ever offer and it had great value . . . ." Paul told Barab to accept the offer, but Barab "refused to do it." Hamrick testified that although they were authorized to accept this settlement, it was not completed before the Hamrick Firm was substituted out.
5. Evidence Relating to the Hamrick Firm's Termination in the T.V. One Action
In October 2013, the district court dismissed the copyright claims from the litigation pursuant to a motion for summary judgment.
Thereafter, the Hamrick Firm told Paul that Respondents were approximately $300,000 in arrears on the accumulated legal fees, and asked that the fees be brought current. Hudson and Paul, who believed Respondents were current in their payments, met with Barab to discuss the matter further. During the meeting, Hudson asked how much it would cost to litigate the matter through trial. Barab responded it would cost between $200,000 to $250,000. Hudson decided he would hire new counsel.
In December 2013, the Hamrick Firm was substituted out and De La Paz took over the T.V. One litigation.
6. Evidence Relating to Invoices and Payments in the T.V. One Action
Respondents testified that they never received any invoices from the Hamrick Firm until after their relationship with the firm broke down. Rather, Hudson made 13 payments totaling approximately $300,000 to the Hamrick Firm because Barab occasionally would ask him for money.
Hamrick testified that Hudson attended approximately six to eight meetings at the Hamrick Firm's office. While there, Hamrick or another attorney would hand deliver copies of the firm's bills to Hudson. Additionally, the Hamrick Firm sent bills to a general, monitored email address for the Roscoe's restaurant chain. The Hamrick Firm also sent invoices by mail to Edward Siegler, an attorney for some of Hudson's businesses who was charged with reviewing legal bills for Hudson.
7. Testimony of Experts Kent and Lear
a. Kent's testimony
Kent testified as an expert on the litigation of intellectual property matters. Kent opined that there were a number of considerations a typical copyright practitioner should discuss with his or her client, and that there were inadequate discussions of those considerations between the Hamrick Firm and Respondents. Additionally, he concluded "that some decisions were made that dramatically increased the cost of the litigation and that they were not justified." The Hamrick Firm objected to this testimony and moved to strike it on the basis that it concerned the standard of care and, therefore, was outside the scope of the trial court's ruling on the motion in limine. The trial court overruled the objection.
More specifically, Kent testified that during the time of the T.V. One Action, there was a trend of losses in copyright infringement matters relating to television and motion pictures. Information about this trend was accessible to intellectual property practitioners in at least a couple of ways. First, an article in the Los Angeles Lawyer detailed a study of the trend. Second, because district court matters are electronically available, intellectual property practitioners could follow cases similar to theirs and observe the trend on their own. Kent further testified that there was a trend by motion picture and television studios to bring early motions to dismiss copyright infringement complaints. As a result of this strategy, courts would permit a plaintiff to amend his complaint, which, in turn, would drive up the plaintiff's costs early in the litigation. A typical intellectual property action cost about $750,000 to $1.2 million to litigate through trial.
Given these issues, Kent stated that before filing a copyright infringement claim, a party should take the time to evaluate the value of the claim. Because the value of the claim could depend on the revenue generated by the infringing property, Kent suggested waiting to file the complaint until after the infringing property had aired.
Concerning a motion for a preliminary injunction, Kent testified that following the decision by the United States Supreme Court in eBay Inc. v. MercExchange, L.L.C. (2006) 547 U.S. 388 [126 S.Ct. 1837, 164 L.Ed.2d 641], it had become unlikely that a court would grant a preliminary injunction to prevent a television show from airing in a copyright infringement matter. Instead, courts favored a damages remedy if a plaintiff's copyright claim ultimately was successful.
Kent opined that before filing the T.V. One Action, the Hamrick Firm should have discussed the trends in the industry, the high cost of copyright litigation, the client's budget versus the amount in dispute, and the potential that Respondents could be ordered to pay attorney fees to a prevailing defendant in a copyright action.
Kent also testified that he did not understand how the T.V. One Action could have been valued in the tens of millions of dollars in the early months of the litigation. Rather, after Belle's was cancelled, Kent suggested pursuing settlement would have been the best option because damages on Respondents' copyright claim would have been based on Belle's profits resulting from the infringement. However, Belle's did not have profits of tens of millions of dollars. Moreover, Kent did not find a factual basis for basing a damages figure on 78 episodes of either Belle's or the Roscoe's Show. He would have questioned an expert who made such an assumption, and discussed it with his client.
b. Evidence Code section 402 hearing relating to Lear's testimony
Prior to Lear's testimony, the Hamrick Firm argued that pursuant to People v. Sanchez (2016) 63 Cal.4th 665, Lear's anticipated testimony was based upon inadmissible hearsay evidence, which included an arbitration brief drafted by De La Paz.
During a voir dire examination, Lear testified that in forming his opinion, he reviewed court orders, a summary relating to the invoices as well as the invoices themselves, a summary relating to Gerbrandt's and Litwak's reports, a timeline, filed pleadings, motions, and declarations, Paul's deposition, and the De La Paz arbitration brief. Lear also spoke with Paul following his trial testimony.
The trial court observed that Sanchez concerned using expert witnesses to get hearsay before the jury that otherwise would not be admissible. The court found that was not what Lear's anticipated testimony attempted to do. In particular, the jury already had received evidence that the Hamrick Firm told Paul that his case was worth millions and that the damages experts based their valuation on 78 episodes. Thus, the trial court concluded Sanchez was not applicable and did not limit Lear's ability to testify.
The Hamrick Firm also argued that Lear's anticipated testimony about the competence of the Hamrick Firm's legal services impermissibly went to the standard of care. Following argument by counsel, the trial court ruled: "The issue . . . is whether [the Hamrick Firm] performed its obligations under the retainer agreement, which is completely a contract standard. I don't see any reason why Mr. Lear cannot testify that their failure to perform competently is a measure of whether they performed their obligations under the retainer agreement."
c. Lear's testimony
Before the jury, Lear opined that the Hamrick Firm's representation that the T.V. One matter was worth tens of millions of dollars violated professional rules of conduct and rules of ethics. Based upon his review of the expert reports as well as his conversations with Kent, Lear believed that the valuation of the T.V. One matter at $25 million was too high and should not have been based on a projection of 78 episodes. He testified that knowledgeable intellectual property lawyers should have known that the 78-episode factor would affect the damages number, and should have communicated the effect of this factor to the client or should have had the damages valuation adjusted downward. He explained that an attorney has an obligation to discuss an expert's evaluation with a client, even if the valuation was not inflated. Thus, based on the information he reviewed, Lear concluded the Hamrick Firm violated Rules of Professional Conduct, rule 3-110(A), which requires a lawyer to perform competently, and rule 3-500, which requires an attorney to keep his client reasonably informed.
Lear acknowledged that a lawyer could be wrong without breaching professional standards. He also acknowledged that he was not an intellectual property attorney, did not himself know that the damages experts' valuations were flawed, and relied on Kent's opinion that the 78-episode factor was too high.
Lear clarified that his opinion was based on the assumptions he made about what transpired between the firm and Respondents. He agreed that he was not offering an opinion as to what actually happened between the Hamrick Firm and Respondents, and that a determination of what happened was for the jury to decide.
During Lear's testimony, with one exception, the Hamrick Firm did not raise any objections that Lear's testimony violated the trial court's prior rulings or was unreliable.
The Hamrick Firm objected that the following question called for speculation: "Is it your opinion that [the Hamrick Firm's] failure to have the numbers, the damage numbers by Mr. Litwak and Mr. Gerbrandt adjusted down from 78 is—represents or reflects a violation of [Rules of Professional Conduct, rule 3-110]?" The trial court overruled the objection. The Hamrick Firm does not refer to this objection or testimony in their opening brief.
8. Rebuttal Testimony to Opinions of Kent and Lear
Following the testimony by Kent and Lear, the Hamrick Firm recalled Hamrick. Hamrick testified that the analysis by Kent and Lear was wrong in a number of ways. For example, Kent and Lear considered only the issue of copyright damages. He disagreed that damages would be limited by the success of the infringing show. Rather, damages would depend on what the Roscoe's Show reasonably could have made in airing the show. Additionally, limiting the damages analysis to six shows was not warranted because there was no evidence that Belle's and the Roscoe's Show would have performed the same. The fact that Hudson could finance several seasons of the Roscoe's Show would have alleviated some or all of the costs to a station or channel, which presumably would have made the show more attractive.
9. Jury's Verdict
The jury returned a special verdict in which they found that none of the Respondents breached the contract, and that Respondents did not owe any monies on an open book account.
The trial court entered judgment on April 25, 2019. The Hamrick Firm timely appealed the judgment.
DISCUSSION
A. Standard of Review
We review the trial court's admission of opinion testimony for an abuse of discretion. (King v. State of California (2015) 242 Cal.App.4th 265, 293.) " 'Discretion is abused whenever, in its exercise, the court exceeds the bounds of reason, all of the circumstances before it being considered. The burden is on the party complaining to establish an abuse of discretion, and unless a clear case of abuse is shown and unless there has been a miscarriage of justice[,] a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power.' " (Denham v. Superior Court (1970) 2 Cal.3d 557, 566, citing Loomis v. Loomis (1960) 181 Cal.App.2d 345, 348-349.)
B. The Trial Court Did Not Abuse Its Discretion in Admitting Kent's Testimony
The Hamrick Firm argues Kent should not have been permitted to testify as to "standard of care" issues when Respondents did not maintain a cross-claim or affirmative defense of malpractice or negligence. The Hamrick Firm expressly acknowledges it does not contend the trial court's rulings on the motions in limine were erroneous. Rather, "it was the subsequent defanging of those rulings, to allow inadmissible opinion testimony to be introduced at trial, that constituted the error." We conclude that Kent's trial testimony did not run afoul of the trial court's motion in limine ruling or impermissibly intrude into tort territory.
" 'The standard elements of a claim for breach of contract are "(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damage to plaintiff therefrom." ' " (Darbun Enterprises, Inc. v. San Fernando Community Hospital (2015) 239 Cal.App.4th 399, 409.) Under the second element, the Hamrick Firm had to prove that it substantially performed under the contract or was excused from doing so. (See Murray's Iron Works, Inc. v. Boyce (2008) 158 Cal.App.4th 1279, 1291-1292 [explaining that in order to recover contract damages, a party must substantially perform his obligations under the contract]; see also 8 Corbin on Contracts (2021) § 34.2, fn. omitted ["The employer's duty to pay wages is almost always constructively conditional on the rendition of substantial performance of his promised service by the employee."].)
Proof that the Hamrick Firm substantially performed its obligations under the contract necessarily encompassed proof that it performed those obligations competently. (See Michaelis v. Benavides (1998) 61 Cal.App.4th 681, 687 [" 'A contract to perform services gives rise to a duty of care which requires that such services be performed in a competent and reasonable manner.' "]; 23 Williston on Contracts (4th ed. 2021) § 63:25, fn. omitted [" '[A]ccompanying every contract is a common-law duty to perform with care, skill, reasonable expediency and faithfulness the thing agreed to be done. A failure to observe any of these conditions is . . . a breach of contract.' "].) Indeed, "defective performance as well as an absence of performance, operates as the non-occurrence of a condition." (Rest.2d Contracts, § 237, com. a.)
Kent's testimony centered on the failure by the Hamrick Firm to communicate adequately with Respondents about the value of the case, the procedural pitfalls and cost of litigation, and the reliability of the opinions by the damages experts. This testimony was relevant to the jury's consideration of one of the elements of the Hamrick Firm's breach of contract claim, namely whether it "did all, or substantially all, of the significant things that the contract required it to do," as instructed by CACI No. 303. It also was relevant to the jury's consideration of Respondent's contention that the Hamrick Firm did not perform as required. As instructed by CACI No. 312, the jury was directed to consider whether the Hamrick Firm overcame this contention by proving that Respondents "received essentially what the contract called for because [the Hamrick Firm's] failures, if any, were so trivial or unimportant that they could have been easily fixed or paid for." Thus, we do not find that Kent impermissibly testified about standard of care issues or that the trial court abused its discretion in failing to curtail his testimony.
For this reason, we find the trial court did not abuse its discretion in permitting Respondents' counsel to argue that the Hamrick Firm was "inept."
The Hamrick Firm also argues Kent's testimony should have been excluded because Kent "offer[ed] opinions on the 'ultimate issue,' " and that "[h]is 'conclusions' were precisely the findings that the jury should have been called on to make." In particular, the Hamrick Firm complains that Kent testified that he concluded there were inadequate discussions of certain matters between the Hamrick Firm and Respondents and that certain decisions the Hamrick Firm made increased Respondents' costs.
The Hamrick Firm did not object to this testimony during trial on the basis that it went to the ultimate issues, amounted to a legal conclusion, or usurped the jury's authority. The Hamrick Firm's objection was limited to an argument that the testimony went to the standard of care. Accordingly, the Hamrick Firm has forfeited its challenge to this testimony on the basis that it went to the ultimate issue or conclusions that the jury should have been permitted to make. (See Evid. Code, § 353, subd. (a) ["A verdict or finding shall not be set aside, nor shall the judgment or decision based thereon be reversed, by reason of the erroneous admission of evidence unless: [¶] . . . There appears of record an objection to or a motion to exclude or to strike the evidence that was timely made and so stated as to make clear the specific ground of the objection or motion[.]"]; SCI California Funeral Services, Inc. v. Five Bridges Foundation (2012) 203 Cal.App.4th 549, 564 [concluding objections to an expert's opinion did not satisfy the requirements of Evid. Code, § 353 because they were neither timely nor sufficiently specific]; Estate of Odian (2006) 145 Cal.App.4th 152, 168 [finding a challenge to the bases for an expert's opinion was not sufficient to preserve objections relating to its admissibility].)
Even considering this issue on the merits, however, we conclude that in permitting this testimony, the trial court did not "exceed the bounds of reason." Under Evidence Code section 805, "[t]estimony in the form of an opinion that is otherwise admissible is not objectionable because it embraces the ultimate issue to be decided by the trier of fact." Rather, an expert's testimony becomes improper when the expert " 'testif[ies] to legal conclusions in the guise of expert opinion' " (King v. State of California (2015) 242 Cal.App.4th 265, 292), or usurps the authority of the jury (Kotla v. Regents of University of California (2004) 115 Cal.App.4th 283). For example, in Kotla, a human resources expert testified about indicators of retaliation. The appellate court determined such testimony was not " 'sufficiently beyond common experience that the opinion of an expert would assist the trier of fact.' " (Kotla, supra, at p. 291, quoting Evid. Code, § 801.) Here, the Hamrick Firm does not argue regular industry practices of intellectual property practitioners are within the common experience of jurors. Furthermore, neither of Kent's challenged statements amounted to a conclusion that the Hamrick Firm failed to substantially perform its obligations under the retainer agreement.
C. The Trial Court Did Not Abuse Its Discretion in Admitting Lear's Testimony
The Hamrick Firm argues that Lear's testimony should have been excluded because (1) he impermissibly testified as to the standard of care, (2) he was not an intellectual property attorney and therefore was not qualified to render opinions relating to professional conduct in intellectual property matters, and (3) his testimony was based on unreliable sources and was speculative.
The Hamrick Firm cites two examples of Lear's testimony that it contends went to the standard of care and that he was not qualified to render because he was not an intellectual property practitioner. In each instance, Lear testified that as intellectual property attorneys, the Hamrick Firm should have realized the damages valuations prepared for the T.V. One litigation were inflated, and the firm should have communicated that information to Respondents. As we described above, opinions relating to whether the Hamrick Firm rendered its services competently bear on whether the Hamrick Firm substantially performed its obligations under the retainer agreement. Accordingly, we do not find this testimony impermissibly related to the standard of care.
Nor do we find this testimony went beyond the scope of the trial court's in limine ruling, which permitted Lear to "testify concerning whether the actions of [the Hamrick Firm] violated any standards of professional responsibility—with specific reference to the standard(s) violated." Lear stated: "There is a [R]ule[s] of [P]rofessional [C]onduct that speaks to that [referring to the Hamrick Firm's evaluation of the reports by the damages experts], and that is rule 3-110(A) which is—creates a duty for a lawyer to perform competently. In my view, in light of the facts that I just indicated to you, the lawyers did not act competently in that manner. They should have communicated more clearly to Mr. Hudson . . . so he could have understood what his case was worth and they should have communicated to the expert witnesses, saying, no, not 78 episodes, six. That is something a copyright or intellectual property lawyer, in my estimation, should have known." This testimony abides by the trial court's in limine ruling.
We now turn to whether Lear was qualified to render these opinions because he was not an intellectual property practitioner. We observe that " '[w]hen the expert's opinion is not based on matter perceived by or personally known to him, but depends on information furnished by others, the opinion will be of little value unless the source is reliable.' " (People v. Cramblit (1978) 84 Cal.App.3d 437, 449.) Here, Lear acknowledged that he relied upon Kent's opinion as to whether the damages valuations were inflated. The Hamrick Firm has not demonstrated that Kent is unqualified as an expert in intellectual property practice, or that his opinion about the damages figure was unreliable. Accordingly, relying on Kent's opinion that the damages figure was inflated, Lear permissibly could testify, based upon his own expertise relating to professional responsibility, that the Hamrick Firm should have taken further action to ensure its clients had the information necessary to make an informed decision about continuing the litigation. We find no error in the trial court's admission of Lear's testimony on this basis.
Finally, the Hamrick Firm argues Lear's opinions "were almost pure speculation, as they were based primarily on assumptions, an advocacy document [the arbitration brief authored by attorney De La Paz], and a single witness's after-the-fact recounting of his prior trial testimony [referring to information supplied by Paul to Lear]."
"An expert opinion must not be based upon speculative or conjectural data. [Citations.] [¶] It is well settled that an expert's assumption of facts contrary to the proof destroys the opinion." (Hyatt v. Sierra Boat Co. (1978) 79 Cal.App.3d 325, 338.)
The Hamrick Firm criticizes Lear's opinion because it relied on an assumption that the T.V. One case was worth $100 million. In its in limine ruling, the trial court recognized that reliance on this damages estimate was unreliable when it ordered that "[a]ny opinion [Lear] expresses based on the [Hamrick Firm's] '$100 million' representation is not based on any facts and would confuse and mislead the jury and is excluded per Evidence Code [section] 352." Thus, at the time of trial, Lear modified his opinion to reflect that the stated damages figure was tens of millions of dollars instead of $100 million. This was not an assumption, but was rooted in Lear's review of Paul's deposition testimony as well as the Gerbrandt and Litwak reports.
Further, in forming his opinion, Lear relied upon more than just an arbitration brief. As he explained during his voir dire examination, in addition to his review of Paul's deposition and the expert reports, Lear reviewed several other documents related to the T.V. One Action, including court orders, pleadings, motions, and declarations. Lear also spoke with Paul following his trial testimony. Accordingly, the Hamrick Firm fails to demonstrate that Lear's testimony was "pure speculation" or lacked sufficient foundation.
D. Standard of Care Jury Instructions
The Hamrick Firm argues the lack of jury instructions relating to the standard of care confirmed that neither Respondents nor the trial court believed standard of care issues were relevant, bolstering their argument that it was error to admit the testimony by Kent and Lear.
Rather than instructing the jury on the standard of care, the trial court properly provided CACI No. 303, outlining the elements for a breach of contract, including the element of substantial performance. As we have explained, the jury was permitted to find that due to its defective performance, the Hamrick Firm failed to establish that it substantially performed its contract obligations. The lack of a standard of care jury instruction is of no consequence.
DISPOSITION
In appeal No. B299124, the trial court's April 25, 2019, judgment is affirmed.
In appeal No. B304066, the trial court's December 6, 2019, order awarding Code of Civil Procedure section 998 expert witness fees to Respondents is reversed, and the matter is remanded to the trial court to modify its order to reflect Respondents' concession that they are not entitled to an award of expert witness fees. In all other respects, the order is affirmed.
Respondents are to recover their costs on appeal.
NOT TO BE PUBLISHED
Judge of the San Luis Obispo County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
ROTHSCHILD, P. J.
CHANEY, J.